Merck shares rose on growing confidence in its cancer pipeline, while Royalty Pharma hit a record high as Ziihera’s FDA approval strengthened its royalty opportunity.
- Wolfe Research raised MRK’s target to $180 from $155 and maintained an ‘Outperform’ rating, according to The Fly.
- The brokerage said Keytruda QLEX with Intismeran will soften the impact of Keytruda’s exclusivity loss.
- Royalty Pharma stands to gain 30% of future royalties from a recently approved gastroesophageal cancer therapy.
Merck (MRK) and Royalty Pharma (RPRX) shares were in focus on Tuesday after positive developments in cancer drugs strengthened the outlook for both companies.
MRK shares rose 3.8% while RPRX stock edged 1.8% higher at the time of writing. Both stocks were trading at their all-time highs.
Royalty Pharma shares are on track to post a seventh gain in eight sessions.
Wall Street Bullish On Merck’s Cancer Pipeline
Merck received two price-target increases after positive melanoma data strengthened confidence in its cancer pipeline.
Wolfe Research raised MRK’s target to $180 from $155 and maintained an ‘Outperform’ rating, according to The Fly. This implies a 15% upside potential from current levels. Analyst Alexandria Hammond said last week’s melanoma trial results reduced uncertainty around the company’s platform in other cancers.
She expects Keytruda QLEX with personalized cancer vaccine Intismeran to soften the impact when Keytruda loses exclusivity in 2029.
Argus lifted its target to $170 from $145 and maintained a ‘Buy’ rating, citing approvals, clinical progress and acquisitions in recent months. The firm also expects Merck to benefit from its broad pipeline, which includes Ifinatamab Deruxtecan for lung cancer, Opevesostat for prostate cancer, and Tulisokibart for ulcerative colitis and Crohn’s disease.
Retail sentiment surrounding MRK on Stocktwits remained in the ‘extremely bullish’ zone over the past 24 hours. The stock has gained nearly 47% so far this year.
Royalty Pharma To Benefit From Gastroesophageal Cancer Therapy Approval
Royalty Pharma shares reached a record high after the FDA approved Ziihera-based treatments as initial therapy for adults with advanced HER2-positive gastroesophageal cancer. Ziihera is a cancer drug.
The approval could expand Ziihera’s sales opportunity, benefiting Royalty Pharma through its financing agreement with the drug’s original developer, Zymeworks. Royalty Pharma provided Zymeworks with a $250 million note secured by 30% of future royalties from Ziihera sales through partners Jazz Pharmaceuticals (JAZZ) and BeOne Medicines (OMC).
Royalty Pharma will receive these payments until it collects at least 1.65 times the note’s value by the end of 2033.
Retail sentiment surrounding MRK on Stocktwits remained ‘bullish’ over the past 24 hours. The stock has added nearly 24% to its value so far this year.
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